(Court OF APPEAL)*

BROKERAGE AND COMMISSION AGENCY LTD v. Ahmed IBRAHIM OSMAN

ACREV-172-1964

 Principles

·  insurance - valued policy-the subject_matter of the insurance is agreed to be valued by the underwriters and insured and not the amount of the loss

In a valued policy, both the subject matter of the insurance contract was to be valued and not the amount of the loss.
 

Judgment

Adovcates: Ahmed Guma’a……………………………….for aplicants

                   Ahmed Amin………………………………….for respondent

Babiker Awadalla J. September 1.1964-Applicant (defendant in the suit) is an insurance agency carrying on business in Khartoum and respondent (plaintiff),  a merchant of Khartoum North.

On January 1.1962 respondent insured with applicants a ford prefect car (1949 model) for a sum of Ł 300 which was declared by respondent in the insurance policy to have been the insurance policy to have been the then value of the car.

In October 1962. the car was accidentally burnt beyond repair and respondent claimed its declared value. There was disagreement between the parties, and they sought ot invoke clause 8 of the revelant policy. The said clause so far as relevant reads as follows:

“8. all differences arising out of this policy shall be referred to the decision of an Arbitrator to be appointed in writing by the parties

in difference or if they cannot agree upon a single Arbitrator, to the decision of two Arbitrators one to be appointed in writing by each of the parties within one calendar month after having been required in writing so to do by either of the parties or in case the arbitrators do not agree of an upon the reference. The umpire shall sit with the Arbitrators and preside at their meetings and the making of an Award shall be a condition precedent to any right of action against the Company.”

Each of the parties appointed an arbitrator. The two arbitrators did not agree and an umpire was appointed. This appointment was not strictly in accordance with clause 8 because it was neither in writing nor before entering upon the reference. Nonetheless the umpire made an award and –according to respondent’s contention-decided that the value of the damged car was Ł s. 170. resondent refused to accept that amount and sued for the full amount at which he had declared the value of the car viz. Łs.300. applicant contested the claim mainly on the ground that it was premature in that no arbitration was made in accordance with clause 8 because the award was not in writing . they also disputed the value.

The learned District Judge-inmy view correcctly-found that there was no requirment under clause 8 for the award to be in writing . but he then went on to declare that the policy in this case being “valued” policy , respondent was entitled to the sum declared by him on the insurance policy, viz Ł 300. the learned District Judge purported to rely in this on the authority of Elcho and Others v. Thomson (1949) 2 K,b,755. in my view the learned District Judge went wrong when he decided that the policy in the case under consideration is a “ valued policy” A valued policy is one where the value of the subject matter of the insurance contract is agreed upon both by the unerwriter and the instured,. That is what happened in Elcock and Others v. Thomson (1949+) 2 K.B.

In my view the parties in this case are governed by clause 4 of the agrrement which reads as follows:

“ the company may at its own option repair reinstate or replace the motor car or part thereof and its accessories or may pay in  cash the amount of the loss or damage and the liability of the company shall not exceed the actual value of the parts damaged or lost plus the reasonable cost of fitting and shall in no case exceed the insured estimate of the value of the motor car (including accessories thereon) as specified in the Schedule or the value of motor car including accessories heron) at the time of the loss whichever is the less”.

respondent can thereof in o case have anything more than the real value of the car if that value is actually less than the declared value if-in the absece of better evidence of better evidence-we are to take the arbitrators award as evidence of that value, then respondent would only be entitled to the amount declared by the arbitrator as being the value of the car in his statement on oath, respondent said that the umpire assessed the car at Łs 170 and on this respondent is supported by P.W.i who was a member of the board D.W. I, on the other hand said that the estimate was Łs 150 Iwill adopt the first figure as being the one more liely to have been declared y the arbitrator. As such respondent would be entitled to sum of Łs 170 minus a sum of Ł s 5 which represents respondent’s contribution under the endorsement to the insurance contract and by virture of which the insured accepted full responsiblility for the first Łs  5.

This application is therefore allowed with costs and the decree of the learned District Judge varied so as to give respondent a sum of Łs 165 and costs thereon.

M. A. Abu Rannat C.J. September 1.1964:- I concur.

* Court : M. A. Abu Rannat C.J. and Babiker Awadalla J.

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BROKERAGE AND COMMISSION AGENCY LTD v. Ahmed IBRAHIM OSMAN

Case No.:

ACREV-172-1964

Court:

Court of Appeal

Issue No.:

1966

Principles

·  insurance - valued policy-the subject_matter of the insurance is agreed to be valued by the underwriters and insured and not the amount of the loss

In a valued policy, both the subject matter of the insurance contract was to be valued and not the amount of the loss.
 

Judgment

(Court OF APPEAL)*

BROKERAGE AND COMMISSION AGENCY LTD v. Ahmed IBRAHIM OSMAN

ACREV-172-1964

Adovcates: Ahmed Guma’a……………………………….for aplicants

                   Ahmed Amin………………………………….for respondent

Babiker Awadalla J. September 1.1964-Applicant (defendant in the suit) is an insurance agency carrying on business in Khartoum and respondent (plaintiff),  a merchant of Khartoum North.

On January 1.1962 respondent insured with applicants a ford prefect car (1949 model) for a sum of Ł 300 which was declared by respondent in the insurance policy to have been the insurance policy to have been the then value of the car.

In October 1962. the car was accidentally burnt beyond repair and respondent claimed its declared value. There was disagreement between the parties, and they sought ot invoke clause 8 of the revelant policy. The said clause so far as relevant reads as follows:

“8. all differences arising out of this policy shall be referred to the decision of an Arbitrator to be appointed in writing by the parties

in difference or if they cannot agree upon a single Arbitrator, to the decision of two Arbitrators one to be appointed in writing by each of the parties within one calendar month after having been required in writing so to do by either of the parties or in case the arbitrators do not agree of an upon the reference. The umpire shall sit with the Arbitrators and preside at their meetings and the making of an Award shall be a condition precedent to any right of action against the Company.”

Each of the parties appointed an arbitrator. The two arbitrators did not agree and an umpire was appointed. This appointment was not strictly in accordance with clause 8 because it was neither in writing nor before entering upon the reference. Nonetheless the umpire made an award and –according to respondent’s contention-decided that the value of the damged car was Ł s. 170. resondent refused to accept that amount and sued for the full amount at which he had declared the value of the car viz. Łs.300. applicant contested the claim mainly on the ground that it was premature in that no arbitration was made in accordance with clause 8 because the award was not in writing . they also disputed the value.

The learned District Judge-inmy view correcctly-found that there was no requirment under clause 8 for the award to be in writing . but he then went on to declare that the policy in this case being “valued” policy , respondent was entitled to the sum declared by him on the insurance policy, viz Ł 300. the learned District Judge purported to rely in this on the authority of Elcho and Others v. Thomson (1949) 2 K,b,755. in my view the learned District Judge went wrong when he decided that the policy in the case under consideration is a “ valued policy” A valued policy is one where the value of the subject matter of the insurance contract is agreed upon both by the unerwriter and the instured,. That is what happened in Elcock and Others v. Thomson (1949+) 2 K.B.

In my view the parties in this case are governed by clause 4 of the agrrement which reads as follows:

“ the company may at its own option repair reinstate or replace the motor car or part thereof and its accessories or may pay in  cash the amount of the loss or damage and the liability of the company shall not exceed the actual value of the parts damaged or lost plus the reasonable cost of fitting and shall in no case exceed the insured estimate of the value of the motor car (including accessories thereon) as specified in the Schedule or the value of motor car including accessories heron) at the time of the loss whichever is the less”.

respondent can thereof in o case have anything more than the real value of the car if that value is actually less than the declared value if-in the absece of better evidence of better evidence-we are to take the arbitrators award as evidence of that value, then respondent would only be entitled to the amount declared by the arbitrator as being the value of the car in his statement on oath, respondent said that the umpire assessed the car at Łs 170 and on this respondent is supported by P.W.i who was a member of the board D.W. I, on the other hand said that the estimate was Łs 150 Iwill adopt the first figure as being the one more liely to have been declared y the arbitrator. As such respondent would be entitled to sum of Łs 170 minus a sum of Ł s 5 which represents respondent’s contribution under the endorsement to the insurance contract and by virture of which the insured accepted full responsiblility for the first Łs  5.

This application is therefore allowed with costs and the decree of the learned District Judge varied so as to give respondent a sum of Łs 165 and costs thereon.

M. A. Abu Rannat C.J. September 1.1964:- I concur.

* Court : M. A. Abu Rannat C.J. and Babiker Awadalla J.